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TheStreet Open House

Rocco: Pandora's Critics Are Wrong, There Are Barriers to Entry

Stocks in this article: PAAPLCCMOGOOGBBRY

Even at the regional and national level. How do you build the scale necessary to score major ad buys? Granted, Apple and Google -- with iTunes and GMAIL users alone -- have gigantic databases of potential users and subscribers. No question. But translate that into actual listener hours and, more importantly, ratings that, for all intents and purposes, make your service the number one radio station across most major markets. It's not easy. Even if you're Apple or Google.

Of course, some clients will buy Apple or Google no matter what. I don't blame them. Both companies probably should be part of any strategy, whether they do Internet radio or not! But they'll need successful services. They'll need to provide the type of radio experience -- assuming they ultimately try to do radio like Pandora does -- the Music Genome Project provides.

If you want to discuss threats, you should really leave Pandora out of the discussion. First, few companies will do pure play radio like Pandora does. Second -- and closely related -- few will focus on the specialized advertising dollars Pandora continues to seize.

Talk about the vulnerability of Internet radio such as Spotify, Slacker and Songza, each with zero scale, relative to Pandora, and services that probably look a lot more like what Google and Apple will do.

But wait! Google is already doing it. So is Twitter. The artist formerly known as RIM -- BlackBerry (BBRY) -- was doing it, but they killed the project. I think Samsung is in the mix as well. That Facebook (FB)/Spotify partnership was supposed to "kill Pandora" also. I guess that didn't turn out as planned.

Every perceived threat has turned into a non-event. That's because, in one way or another, they're on Pandora's periphery. As the Internet radio leader -- by a mile -- continues to execute with laser-like focus, I think the company actually likes the presence of these things that distract so many others from doing what it takes to win.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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